II 

118TH CONGRESS 

2D SESSION S. 5204 

To amend the Internal Revenue Code of 1986 to increase the limitations 

for deductible new business expenditures, to consolidate provisions for 

start-up and organizational expenditures, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

SEPTEMBER 25, 2024 

Ms. ROSEN (for herself, Mrs. SHAHEEN, Ms. BALDWIN, Mr. WYDEN, Mr. 

BLUMENTHAL, Ms. KLOBUCHAR, Mr. HEINRICH, Mr. COONS, and Mr. 

WARNOCK) introduced the following bill; which was read twice and referred to the Committee on Finance 

A BILL 

To amend the Internal Revenue Code of 1986 to increase 

the limitations for deductible new business expenditures, 

to consolidate provisions for start-up and organizational 

expenditures, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Tax Relief for New 

5 Businesses Act’’. 


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1 SEC. 2. NEW BUSINESS EXPENDITURES. 

2 (a) CONSOLIDATION OF DEDUCTION FOR START-UP

3 AND ORGANIZATIONAL EXPENDITURES.— 

4 (1) IN GENERAL.—Section 195(a) of the Inter5 nal Revenue Code of 1986 is amended by inserting 

6 ‘‘or organizational’’ after ‘‘start-up’’. 

7 (2) ORGANIZATIONAL EXPENDITURES.—Sub8 section (c) of section 195 of the Internal Revenue 

9 Code of 1986 is amended by adding at the end the 

10 following new paragraph: 

11 ‘‘(3) ORGANIZATIONAL EXPENDITURES.—The 

12 term ‘organizational expenditures’ means any ex13 penditure which— 

14 ‘‘(A) is incident to the creation of a cor15 poration or a partnership, 

16 ‘‘(B) is chargeable to capital account, and 

17 ‘‘(C) is of a character which, if expended 

18 incident to the creation of a corporation or a 

19 partnership having a limited life, would be am20 ortizable over such life.’’. 

21 (3) CONFORMING AMENDMENTS.— 

22 (A) Section 195(b)(1) is amended— 

23 (i) by striking ‘‘with respect to any 

24 start-up expenses’’ and inserting ‘‘with re25 spect to any active trade or business’’, 


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1 (ii) by striking ‘‘the amount of start2 up expenditures with respect to’’ in sub3 paragraph (A)(i) thereof and inserting 

4 ‘‘the aggregate amount of start-up and or5 ganizational expenditures paid in connec6 tion with’’, and 

7 (iii) by adding at the end the fol8 lowing flush sentence: 

9 ‘‘In the case of a partnership or S corporation, the 

10 election under the preceding sentence shall be made 

11 at the entity level.’’. 

12 (B) Section 195(b)(2) of such Code is 

13 amended— 

14 (i) by striking ‘‘AMORTIZATION PE15 RIOD.—In any case’’ and inserting the fol16 lowing: ‘‘AMORTIZATION PERIOD.— 

17 ‘‘(A) IN GENERAL.—In any case’’, and 

18 (ii) by adding at the end the following 

19 new subparagraph: 

20 ‘‘(B) SPECIAL PARTNERSHIP RULE.—In 

21 the case of a partnership or S corporation, sub22 paragraph (A) shall be applied at the entity 

23 level.’’. 

24 (C) Section 195(b) of such Code is amend25 ed by striking paragraph (3). 


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1 (D)(i) Part VIII of subchapter B of chap2 ter 1 of such Code is amended by striking sec3 tion 248 (and by striking the item relating to 

4 such section in the table of sections for such 

5 part). 

6 (ii) Section 170(b)(2)(C)(ii) of such Code 

7 is amended by striking ‘‘(except section 248)’’. 

8 (iii) Section 312(n)(3) of such Code is 

9 amended by striking ‘‘Sections 173 and 248’’ 

10 and inserting ‘‘Section 173’’. 

11 (iv) Section 535(b)(3) of such Code is 

12 amended by striking ‘‘(except section 248)’’. 

13 (v) Paragraphs (3) and (4) of section 

14 545(b) of such Code are each amended by strik15 ing ‘‘(except section 248)’’. 

16 (vi) Section 834(c)(7) of such Code is 

17 amended by striking ‘‘(except section 248)’’. 

18 (vii) Section 852(b)(2)(C) of such Code is 

19 amended by striking ‘‘(except section 248)’’. 

20 (viii) Section 857(b)(2)(A) of such Code is 

21 amended by striking ‘‘(except section 248)’’. 

22 (ix) Section 1363(b) of such Code is 

23 amended by inserting ‘‘and’’ at the end of para24 graph (2), by striking paragraph (3), and by re25 designating paragraph (4) as paragraph (3). 


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1 (x) Section 1375(b)(1)(B)(i) of such Code 

2 is amended by striking ‘‘(other than the deduc3 tion allowed by section 248, relating to organi4 zation expenditures)’’. 

5 (E)(i) Section 709 of such Code is amend6 ed to read as follows: 

7 ‘‘SEC. 709. TREATMENT OF SYNDICATION FEES. 

8 ‘‘No deduction shall be allowed under this chapter to 

9 a partnership or to any partner of the partnership for any 

10 amounts paid or incurred to promote the sale of (or to 

11 sell) an interest in the partnership.’’. 

12 (ii) The item relating to section 709 in the 

13 table of sections for part I of subchapter K of 

14 chapter 1 of such Code is amended to read as 

15 follows: 

‘‘Sec. 709. Treatment of syndication fees.’’. 

16 (F) The heading of section 195 of such 

17 Code (and the item relating to such section in 

18 the table of sections for part VI of subchapter 

19 B of chapter 1 of such Code) are each amended 

20 by inserting ‘‘and organizational’’ after ‘‘Start21 up’’. 

22 (b) INCREASE IN LIMITATION.—Clause (ii) of section 

23 195(b)(1)(A) of the Internal Revenue Code of 1986 is 

24 amended— 


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1 (1) by striking ‘‘$5,000’’ and inserting 

2 ‘‘$50,000’’, and 

3 (2) by striking ‘‘$50,000’’ and inserting 

4 ‘‘$150,000’’. 

5 (c) APPLICATION OF NET OPERATING LOSS

6 RULES.—Section 172 of the Internal Revenue Code of 

7 1986 is amended by redesignating subsection (g) as sub8 section (h) and by inserting after subsection (f) the fol9 lowing new subsection: 

10 ‘‘(g) SPECIAL RULES FOR START-UP AND ORGANIZA11 TIONAL EXPENDITURES.— 

12 ‘‘(1) IN GENERAL.—In the case of a taxpayer 

13 making an election under this subsection— 

14 ‘‘(A) this section shall be applied sepa15 rately to start-up and organizational net oper16 ating losses and other net operating losses, 

17 ‘‘(B) in applying this section to start-up 

18 and organizational net operating losses— 

19 ‘‘(i) subsection (a)(2)(B) shall be ap20 plied by substituting ‘100 percent’ for ‘80 

21 percent’ in clause (i) thereof, and 

22 ‘‘(ii) subsection (b)(2)(C) shall not 

23 apply, and 

24 ‘‘(C) in applying this section to other net 

25 operating losses, for purposes of subsections 


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1 (a)(2)(B)(ii)(I) and (b)(2), taxable income shall 

2 be reduced by the amount of the deduction al3 lowed under this section with respect to start4 up and organizational net operating losses. 

5 ‘‘(2) START-UP AND ORGANIZATIONAL NET OP6 ERATING LOSS.—For purposes of this section, the 

7 term ‘start-up and organizational net operating loss’ 

8 means the amount which would be a net operating 

9 loss if the only deduction taken into account were 

10 the deduction allowed under section 195. 

11 ‘‘(3) OTHER NET OPERATING LOSSES.—For 

12 purposes of this section, the term ‘other net oper13 ating loss’ means the net operating loss determined 

14 without regard to the deduction allowed under sec15 tion 195. 

16 ‘‘(4) ELECTION.—An election under this section 

17 shall be made at such time and in such form and 

18 manner as the Secretary shall prescribe. Such an 

19 election, once made, shall be irrevocable.’’. 

20 (d) EFFECTIVE DATE.—The amendments made by 

21 this section shall apply to expenses paid or incurred in 

22 taxable years beginning after December 31, 2024. 

Æ 


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